USF Survey: Growing Confidence in the Economy

Venture capitalists (VCs) based
in Silicon Valley are more confident in the economy than at any time since the
2008 economic collapse, according to a recent survey by Mark
Cannice, professor of entrepreneurship and innovation in USF’s School of
Management.

Improving economy

The average confidence
level of the 32 VCs who answered the survey was 3.94 on a scale of one-to-five (five
indicating high confidence), making this the sixth consecutive quarter Silicon
Valley VCs have indicated growing faith in an economic recovery.

"More
venture capital-backed startups were able to list on the stock exchanges in
2013," Cannice said. "That allowed for good returns on the capital
that venture capitalists invested in those startups, and some of that capital
will be reinvested in the next generation of high-growth startups.”

Risk of overheating

Still, some VCs signaled a
need for caution in specific sectors. "While the level of innovation in Silicon
Valley is unprecedented in its scope, there is a risk of overheating in some
areas, including social media and social commerce," said Robert Ackerman of Allegis Capital.

The Jan.
30 report is the 10th anniversary of the Silicon Valley Venture Capitalist Confidence Index.
It is frequently cited in the Wall Street Journal and other publications as an
economic indicator, because VCs are among the first to invest in developing
companies.